Tuesday, September 30, 2008

Avoiding "economic calamity"... let's hope so

Is anybody else having trouble keeping track of all the hundreds of billions being doled out by the US government to prop up global financial markets and "avoid economic calamity" (quoting a NY Times headline this morning)?

The House yesterday rejected the so-called "bailout" plan that would have dumped $700 billion into financial markets. But at the same time, the feds are spreading billions of dollars around like Monopoly money.

From an article in today's NY Times:
"With money markets around the world seizing in fear, the Fed on Monday announced that it would provide an extra $150 billion through an emergency lending program for banks, and an additional $330 billion through so-called swap lines with foreign central banks to help money markets from Europe to Asia....

"That was on top of the $230 billion the Fed borrowed last week so it could finance its previous efforts to prop up the American International Group and other institutions. But these are only the latest in a long series of jaw-dropping departures from normal policy that the Fed has undertaken this year as it seeks to inject vast amounts of capital into the financial system. And they are unlikely to be the last.

I don't pretend to fully understand how all this works (or doesn't), try as I might, but it is certainly very very scary.

One thing that's much easier to understand is the lack of leadership on display in Washington. They played a game of chicken on the bailout bill. Nobody wanted to be caught holding the bag. Both "sides" wanted to be able to hold the the other responsible. Typical. And disgraceful.

Here's one other thing I don't get. How can McCain with a straight face blame Obama for the bailout plan being ditched by Congress, when McCain's party rejected it overwhelmingly. Even the eight members of the House representing McCain's home state of Arizona voted NO, including the state's four Republican congressmen. (The congressman from Alaska, also a Republican, voted no, too, I might add.) Way to deliver.

It's funny (using that word loosely) how the presidential candidates and all the political nonsense have so rapidly become largely irrelevant as we watch the train wreck that is Wall Street-Washington DC.

1 comment:

Ceil said...

Hi Denise..This bailout fiasco is
a result of the administrations lack of: leadership;blatant deregulation; low/no confidence in Bush policies ( look they lied over the WMD) and party politics....and on the brink of "economic calmity or disaster"
Congress takes a recess Huh??????
I understand the Jewish folks going home for their holiday, but
everyone else?

Those folks that applauded Reagans "hand off" government are now begging for the Feds to do something.

Should they? Yes but I don't want to swallow this bitter pill anymore then anyone else. I don't want to pay for the mistakes of others. I live within my means, earned my retirement, however, to watch my porfolio take a nose dive is very scary indeed.

But without a plan, and it's not only Wall Street, but economy will suffer. We are seeing the results.
The day the market lost778 points, we lost 1.2 trillion dollars !!

Liquidy will disappear, credit and buying power ( If any is left)will dry up and banks will be in a deep freeze. What about student loans and folks retirement?

Blame? There is plenty of blame to go around: From the folks who bought without money imagine stated income loans aka liar loans!!! The preditory lenders, banks, and the administration that turned it's back on the swill.

McCain blaming Obama for the derailment of the bail out - he will blame him if he (McCain) wears the wrong color tie. That's his MO

After the 9/11 attacks our economy tanked through no fault of our own, but this mess was brought upon ourselves by greed and corruption. What happened to the moral fiber of this great nation?